There are several welcome developments in today’s budget from a foreign investment perspective.
Firstly, at a high level, foreign investors welcome a solid and stable budgetary regime – it provides confidence to the investor community. Investors pay attention to a country that can balance its Budget.
Part of that stability is contained in Ireland’s competitive, transparent and pro-business corporation tax regime. This remains a cornerstone of Ireland’s economic development. Once again, Minister Donohoe clearly outlined that Ireland will not be changing that 12.5% tax rate. The stability of the 12.5% rate is a key factor for our investors. It is important that Ireland’s commitment to the rate was restated in a budgetary context. The Budget also contains measures that progress the already published Corporate Tax Roadmap, in line with international commitments.
Secondly, every investment agency in the world will be competing to win mobile investment in a post-Brexit environment. The additional resources announced by Minister Humphreys today will help us compete for any mobile investment arising out of Brexit. The additional funding allocated today will allow IDA to continue to increase its footprint and double down in existing markets. This year, IDA will open a new office in Canada as well as placing resources in markets such as UAE, Israel, Turkey and South Africa.
Thirdly, IDA Ireland welcomes the additional €10 million funding for the Regional Property Programme. This programme has been designed to win investments and jobs into Regional locations with the objective of creating high-spec pre-built turnkey property options that businesses could move into at short notice. IDA plans to develop new buildings in regional locations including Carlow, Dundalk, Monaghan, Sligo, Athlone, Waterford, Limerick, Galway. This builds on the existing successful regional capital programme, the success of which is evident in the increased regional investments that we have seen over the lifetime of the current IDA Strategy.
The 2019 Budget has provided additional resources to cover the areas of housing, education and infrastructure - coupled together with updates to personal taxation arrangements. As a package, this will make Ireland a more competitive place to sell internationally.
Foreign Direct Investment is a vital part of the Irish economy. Every day in Ireland, more than 210,000 people go to work in an IDA Ireland-supported multinational company. IDA’s latest results show that IDA clients account directly for 10% of total employment In Ireland, representing a vital economic contribution by the multinational sector.
Competition for foreign investment has never been stronger and other countries are constantly adjusting their proposition for investors on a daily basis.
Martin Shanahan is Chief Executive Officer at IDA Ireland